Appetite for junk stocks declines
The delisting of two junk stocks has left an impact on the capital market, as prices of 37 among 44 such companies continued to decline for the second straight day in Dhaka Stock Exchange yesterday.
On July 18, the premier bourse delisted Modern Dyeing and Rahima Food Corporation for having no operations for over three years. Industry analysts welcomed the decision saying it would inspire good companies and investors to come to the market.
“We have been urging investors for many years not to invest in junk stocks but none paid heed to us” said Mohammad Musa, a capital market analyst and a professor of United International University.
Some investors might have lost money because of the delisting, but “this is a praiseworthy decision for the capital market”, he said.
However, stocks on the DSE gained slightly yesterday for a third consecutive day. The DSEX—the benchmark index of the Dhaka bourse—rose 1.75 points or 0.03 percent before finishing the day at 5,339.18. Turnover—another important indicator of the market—also jumped 15.6 percent from Thursday to Tk 1,054.93 crore yesterday, with 22.39 crore shares and mutual fund units changing hands.
Of the traded issues, 142 advanced, 171 declined and 26 closed unchanged on the premier bourse. BBS Cables dominated the turnover chart with 38.83 lakh shares worth Tk 40.98 crore changing hands, followed by Ifad Autos, Nahee Aluminum, KDS Accessories and Aman Feed.
Among the major sectors, engineering increased 2.36 percent followed by life insurance 1.10 percent, miscellaneous 0.88 percent and pharmaceuticals 0.53 percent.
Conversely, banks and financial institutions declined 1.42 percent and 0.79 percent respectively. Aamra Technologies was the day's best performer with 10 percent gain followed by AFC Agro Biotech, Nahee Aluminum, S Alam Cold Rolled Steels and Quasem Industries.
Imam Button was the worst loser with a 10 percent fall followed by Savar Refractories, United Airways, Jute Spinners and Meghna Pet Industries. Chittagong stocks also soared with the bourse's benchmark index, CSCX, advancing 12.66 points to finish the day at 9,960.75.
Gainers beat losers as 118 issues advanced, 107 declined and 19 finished unchanged on the Chittagong Stock Exchange. The port city bourse traded 2.31 crore shares and mutual fund units worth Tk 80.11 crore.
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